In conversation with Eduard Faig, Regional Sales Manager – Middle East, Africa and India at Ritchie Bros.
Tell us how Ritchie Bros. managed to operate and maintain its business during the peak of the Covid-19 pandemic in 2020?
Before COVID-19, Ritchie Bros. already had a solid online infrastructure, with over 70 percent of winning bids in its live auctions coming from online bidders.
However, in March 2020, Ritchie Bros. completed an ongoing digital transition by fully pivoting from live, in-person auctions to an entirely online auction format that was accelerated due to pandemic lockdowns.
With border closures and travel restrictions, online selling methods such as our quarterly online timed auctions are now preferred by many international buyers because they’ve been unable to fly into Dubai or elsewhere to attend in-person auctions for an extended period. Our strong online auction results are proof of widespread customer acceptance of the new format, and they have now become the industry norm.
We were honoured to have our transition to online auctions recognized when we received the award for Best Innovative Auction Solutions at the Construction Innovation Awards 2021, recently held in Dubai. I want to thank our entire team at Ritchie Bros., as well as our valued clients, for making this kind of industry recognition possible.
Can you provide some insight into the innovation behind Ritchie Bros. auctions and why customers choose Ritchie Bros. to get their used equipment?
Pre-COVID, our auctions featured live online and on-site bidding. Only smaller, lower value items were sold in online Timed Auctions. When COVID kicked in, there was a lot of uncertainty in the market. Still, many businesses continued to need to sell and buy machinery. The live auction model was no longer possible, so we adapted our Timed Auctions to accommodate the change. Customers were able to continue to adapt their fleets to any circumstances. In addition to this, we added other technology to make fleet management and disposition easier, including our online marketplace and Ritchie Bros. Asset Solutions, a suite with fleet tracking, evaluating and selling solutions.
Our online timed auctions are held quarterly in Dubai and are particularly well-known. There is no ‘chanting’ auctioneer and instead we use an easy-to-use auction system. An Advantages are that bidding is open for several days and bidders get notifications on their device to stay up to date. Just like the traditional live auctions, there are no reserve prices and the highest bidder always wins the item.
The online listings for inventory in the auctions contain numerous photos, inspection reports, and other details. This information helps buyers understand the equipment they are bidding on and most importantly ensures buyer confidence – which is essential because all inventory is sold ’as is, where is.’
It’s fair to say that when it comes to selling, the more eyes that are on your equipment, the better the price performance is. This is where online auctions effectively increase international reach and get your equipment in front of as many potential buyers as possible. We regularly see UAE-based dozers sold to buyers in Peru and excavators from the Gulf region sold to buyers in Uganda. This kind of international reach is hard to find elsewhere. Ritchie Bros. is uniquely positioned to connect Gulf-based equipment sellers to overseas buyers using its innovative online timed auction format, and we are seeing the growing popularity of this service.
Regarding the market overview in the UAE and the Middle East, what are the key trends you see that indicate positive signs in your industry?
Overall demand remains strong, as is reflected in auction participation and price performance. If you look at our most recent Dubai online timed auction that took place on September 14 & 15 as an example, we had 1,153 bidders, with 346 being UAE-based while the remainder were from 81 countries, including Egypt, KSA, Jordan, and Kuwait. Outside the MENA region, bidders came from as far afield as the USA, Canada, the UK, the Netherlands and Germany.
In terms of buyers, the total was 267 from 47 countries, with 176 based in the UAE. Top MENA region buyer countries were UAE, Egypt, KSA, Jordan, and Lebanon, while the top international buyer countries were India, the Netherlands, the USA, Nigeria, and Kazakhstan.
We are seeing growing interest from Kazakhstan buyers at many Ritchie Bros. auctions globally. Furthermore, we are experiencing increased demand for all-terrain cranes and rock trucks, as well as motor graders and crawler tractors, from bidders around the world.
If you could describe some Ritchie Bros. new products and services and how they can benefit construction clients, which ones would they be?
We really want to emphasise that Ritchie Bros. is more than just quarterly online timed auctions.
We also operate Marketplace-E, an ‘everyday’ online, listing site with global sellers and buyers. Unlike our unreserved price quarterly auctions, sellers can achieve quicker results with access to a global audience of online buyers. This asset disposition solution is especially suited to highly specialised items of equipment. Key differences are that sellers can set and control their reserve selling prices. Equipment is sold from the consignor’s location, eliminating transportation costs for the seller.
What’s more, Ritchie Bros. offers a suite of asset management services, including equipment refurbishment and logistics services.
It’s also worth mentioning Ritchie Bros. Asset Solutions. This web-based, mobile-friendly suite of services tracks assets with real-time market valuations, provides inspection and appraisal services, and enables the workflow of equipment and truck inventory to multiple disposition channels with a simple click. This can be very useful for the busy fleet manager. Recently, a new, free Asset Valuator tool was launched, which pulls historical data from our global disposition channels, including Ritchie Bros. auctions, IronPlanet, Marketplace-E, and Mascus. Using data from millions of previously sold items, the algorithm calculates average prices and estimates the current value of equipment, which can help fleet managers make the right asset management decisions.
What is your flexible payment plans and how do they help clients?
Ritchie Bros. is now offering a broader range of financing options for customers based in the Emirates.
From mid-2021, UAE-based buyers can benefit from an expanded range of heavy equipment and machinery that is eligible for financing by Emirates NBD bank. This initiative is the result of an industry-leading partnership between Emirates NBD bank and Ritchie Bros.
Ritchie Bros. remains committed to introducing new and innovative options to help eligible UAE-based customers manage their current and future fleet management needs without the need for a full, upfront investment. The Emirates NBD financing facility is a significant part of this mission. It is already delivering benefits for many Ritchie Bros. clients based in the Emirates.
You can find the financing ribbon on inventory photos identifying machinery and heavy equipment eligible for this service.
Ritchie Bros. recently acquired Euro Auctions to expand its reach in the EMEA region. How will this acquisition help to position Ritchie Bros. as a market leader in the EMEA region?
We’re looking forward to welcoming Euro Auctions into the Ritchie Bros. family. The two companies are a good fit with one united goal: to make asset insights, service offerings, and equipment disposition solutions more accessible than ever. The acquisition will help accelerate our growth internationally and create a truly global marketplace. Ritchie Bros.’ customers will be able to experience the expertise of Euro Auctions in sourcing equipment to accelerate the disposition process. Euro Auction customers will be able to access the Ritchie Bros.’ suite of expanded services and capabilities for an improved asset management experience.
It’s still early days, and the acquisition deal is expected to close by year-end or early 2022 once regulatory approvals and other customary closing conditions have been finalised. More details on this will follow soon.
It’s important to say that it is business as usual in the meantime. Ritchie Bros. is planning to hold four quarterly online auctions in 2022, as is usually the case. These are planned for March, June, September, and December.
Our next quarterly Dubai online timed auction will take place in December, and hundreds of equipment items are already for sale. Bidding opens on December 7, 2021 and ends at staggered times on December 14 and 15. Don’t delay in consigning your equipment. The longer your equipment is on our auction site, more eyes will see it, and the greater the likelihood of stronger pricing.
What are the main challenges you foresee soon, and how does Ritchie Bros. plan to overcome them?
From an industry point of view, one of the biggest challenges clients tell us they are currently facing is the increasing delays in new equipment deliveries. Similar to the situation in Europe and North America, a growing number of equipment buyers throughout the Middle East, Africa, and India are experiencing longer lead times on the delivery of new equipment, largely due to delays resulting from COVID-19 related supply chain issues.
This is exactly where our company has turned a problem into an opportunity and where we believe we can deliver the right kind of asset management solutions. Online auctions – such as those organized by Ritchie Bros. – can help buyers secure equipment more quickly because machinery and heavy equipment inventory is immediately available and can be shipped without delay.
It’s a common misconception that only used equipment is available in our auctions or marketplaces. That’s not the case. Our auctions routinely feature unused equipment and very low mileage/hour or near-new surplus equipment. So, it’s always worth regularly checking our website.
In the first quarter of 2021 alone, Ritchie Bros. global website traffic was up 47% year over year, while bidder registrations were up 49%. Increased buyer activity can be attributed to the fact that auctions provide quick access to work-ready equipment, not only in the Middle East but around the world.
Another challenge we are addressing is language barriers. This is particularly important as we continue to grow our presence across the Arabic-speaking region into key markets, such as Saudi Arabia and Egypt. We’re pleased to say that online auction support is available in Arabic, and we recently released an Arabic language ‘How to’ auction video, which is available on request. Ritchie Bros. now operates an online auction website mostly in Arabic, and we also have a local team of Arabic-speaking territory managers to help buyers and sellers in the region. Be sure to visit our Arabic language website: www.rbauction.ae
For our English language website, go to www.rbauction.com/dubai